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Thursday, June 05, 2014

MSIL representative’s visit Gujarat’s new Chief Minister

The Gujarat government on Wednesday advised carmaker Maruti Suzuki India to seek proper legal counsel to sort out technical glitches that might arise from a two-company model at its proposed Gujarat facility. Chief minister Anandi Patel and finance minister Saurabh Patel suggested to Maruti Suzuki chairman RC Bhargava that the company ensure proper procedure is followed while implementing the Rs 4,000 crore car manufacturing project in north Gujarat to avoid getting trapped in possible legal issues later, Bhargava told ET.

"We briefed the state about the two-company model and assured that our investment plans for the state remain intact," he said. While the proposed project has reportedly met with obstacles pertaining to land acquisition, Bhargava denied any knowledge of this. In June 2012, MSIL signed a state support agreement with the Gujarat government for the purchase of land and the setting up of a manufacturing facility. In January 2014, the MSIL board approved a plan in which the proposed plant in Gujarat would be built by Suzuki Motor Gujarat Ltd. Gujarat, however, had concerns about VAT refunds in this two-company model pertaining to production and sale.

As per the original plan, MSIL was both producer and seller, while under the new plan SMGPL would be the exclusive producer and seller of cars to MSIL. Bhargava said, "The state has assured us that it is committed (about incentives) to the project." Later, addressing a gathering of entrepreneurs and industrialists in Ahmedabad, he said: "The Prime Minister has ignited ambition in people to achieve... we finally have a leader who has a vision to take India to global leadership position. India Inc. will be a reality soon."